The Australian Financial Complaints Authority (AFCA) has ruled in favour of a Community Broker Network authorised representative after a dispute sparked when a truck was damaged during a brief period when the vehicle had been removed from a policy.

The broker was instructed on February 5 2018 to remove 24 vehicles from a policy covering a fleet of trucks. They were reinstated on March 13, but in the meantime one of the vehicles was involved in an accident.

No claim could be lodged, as the truck was not covered at the time of the accident, causing the complainant to seek compensation from the broker.

The policyholder argued the broker acted without proper instructions in removing the vehicles from the policy and was liable for the loss, as the person who made the February request was not an employee or authorised to provide instructions.

But the broker noted the person had signed the letter of appointment that authorised the broker to begin acting for the complainant, and had been involved in other exchanges, including being the main contact on a financing loan application. The total amount financed was $224,529.65.

A public liability certificate was also sent to the person and another representative in April 2019, with no concerns raised.

The complainant said they had a relationship with the broker before the letter of appointment was signed, and the letter was not on the company’s proper letterhead.

AFCA says the complainant had not provided evidence to show there was a relationship with the broker before the letter of appointment and only produced an insurance document dated after the letter of appointment was signed.

Other documentation, including financing for a significant amount, also reinforced that the person was authorised to represent the policyholder in the insurance arrangements, and a broker “exercising reasonable care and skill” would have accepted they were authorised, AFCA says.

The complainant had failed to show the broker breached its duties when acting on the person’s instructions to remove the 24 vehicles, the decision says.

“It follows that I am not satisfied the broker is liable to pay compensation to the complainant,” the adjudicator finds.

The decision is available here.